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Ununited Kingdom

Another surprise election result in the UK. The Conservative party, has polled much worse than expected in the snap general election recently called by Prime Minister Theresa May. This undermines the Conservatives as the leading party in the UK and crucially, the strength and stability of the UK to negotiate favorable terms on Brexit.

In a calculated move to call an early election (that has backfired), Theresa May is now under pressure to seek coalition parties to form a new majority government but the public interest in and appetite for a ‘hard Brexit’ appear to have waned somewhat and caused uncertainty as to the future direction of the UK and any Brexit negotiations. That uncertainty has impacted the stock market and the UK currency.

Impact

Sterling has weakened in the short term versus the Euro and the US dollar as investors digest the news and its implications

Interestingly, the FTSE 100 has risen. This is largely due to the fact that many of the companies are large foreign multi nationals who will benefit from a weaker sterling when it comes to repatriating and reporting profits in sterling.